Image: BigstockThe cryptocurrency rally came to a sudden halt in April after a robust 2023 and a strong first quarter. The first quarter saw Bitcoin (BITCOMP), the world’s most popular cryptocurrency, hitting an all-time high of $73,750. However, Bitcoin has since retreated sharply, with its price hovering around $68,000 on May 23. In fact, Bitcoin has fallen 15% since hitting an all-time high on March 14.One of the major reasons behind the decline is the recently concluded halving event, which takes place once in four years. The halving event cuts the block reward by half, aiming to limit Bitcoin’s total supply to 21 million coins. As a result, the reduced rate of new Bitcoin issuance typically leads to increased demand for the cryptocurrency, which in turn tends to drive up its price.Also, Wall Street suffered in April after a first-quarter rally, as concerns grew over rising inflation. This led to the optimism surrounding rate cuts fading fast as investors feared that the Federal Reserve could keep interest rates higher for a longer period.High interest rates have a negative impact on growth assets such as technology stocks, consumer discretionary stocks, and cryptocurrencies. However, Bitcoin still has a lot of potential. Year-to-date, Bitcoin has gained 54% after increasing 207% in 2023. The halving event has also concluded.Also, the cryptocurrency has jumped more than 50% since the launch of the first Bitcoin ETFs in early January.The minutes of the Federal Reserve’s April 30-May 1 meeting of the FOMC revealed that several officials are in favor of hiking interest rates if the need arises, as inflation is still above its 2% target. However, recent economic data showed that inflation declined in April after increasing in the first quarter. The consumer price index (CPI) increased 0.3% month-over-month in April, which was lower than economists’ expectations of a rise of 0.4%. Year-over-year, CPI rose 3.4%.Also, GDP grew only 1.6% in the first quarter after expanding 3.4% in the final quarter of 2023. Besides, retail sales remained flat in April after increasing 0.3% in March, while manufacturing and services activity also slowed last month.These signs of a slowing economy have raised hopes that the Federal Reserve could soon start interest rate cuts, which would help the cryptocurrency market.
Our Choices
We have narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold).
NVIDIA Corporation (NVDA – Free Report)
This company is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence, and the mining or production of cryptocurrencies.NVIDIA’s expected earnings growth rate for the current year is 89.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the last 60 days. Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy).
Robinhood Markets, Inc. (HOOD – Free Report)
This next one operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. Robinhood buys and sells Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies using its Robinhood Crypto platform.Robinhood Markets’ expected earnings growth rate for the current year is 198.4%.The Zacks Consensus Estimate for current-year earnings has improved 160.9% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2 (Buy).
Coinbase Global, Inc. (COIN – Free Report)
Coinbase Global offers financial infrastructure and technology to support the global cryptocurrency economy. Coinbase Global provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.Coinbase Global’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 357.3% over the last 60 days. Coinbase currently sports a Zacks Rank #1 (Strong Buy).
Interactive Brokers Group, Inc. (IBKR – Free Report)
Finally, this company is a global automated electronic broker. Interactive Brokers Group executes, processes, and trades in cryptocurrencies. The company’s commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.Interactive Brokers Group has an expected earnings growth rate of 12.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.9% over the last 60 days. Interactive Brokers Group currently has a Zacks Rank #1 (Strong Buy).More By This Author:2 Stocks That Could Keep Soaring After Crushing Earnings Expectations2 Consumer Discretionary Stocks Poised To Cruise HigherNvidia Stock: Cheaper Than It Was A Year Ago
